£228m sale meets merger condition
Wood deal sealed as Amec Foster Wheeler sells assets
Robin Watson: transformational acquisition
Amec Foster Wheeler is selling the majority of its UK North Sea operations to WorleyParsons Europe in a £228m deal which seals its merger with Wood Group.
The disposal of assets formed a key condition of the £2.2 billion tie-up and was approved by the Competition and Markets Authority last month.
This business being sold consists of the majority of Amec Foster Wheeler’s UK upstream oil and gas business in the UK and serving UK customers.
Last year it contributed revenues of £740m and trading profit of £43m and in the first half of this year revenues of £323m and trading profit of £34m. Both periods include a significant contribution from major projects which are expected to complete in the near term. The value of the gross assets the subject of the transaction is £459m.
The transaction is expected to close at the end of this month. The cash proceeds will be used to reduce net debt. Amec Foster Wheeler was advised on the disposal by Rothschild.
Wood Group has now completed the acquisition of Amec Foster Wheeler and new ordinary shares will begin trading on the main market today.
Robin Watson, Chief Executive of Wood Group commented: “This transformational acquisition creates a global leader in the delivery of project, engineering and technical services to energy and industrial markets.
“We become a business of significant scale and enhanced capability delivering services across a broader range of geographies and sectors, differentiated by the quality of our people, enabling technology and know-how.
“Wood is better placed to serve customers than ever before, with a more comprehensive range of capabilities and the potential to deliver efficient integrated solutions with fewer customer interfaces.
“We expect to deliver significant cost synergies and incremental revenue synergies in a less cyclical business which retains a predominantly reimbursable, asset light model with a balanced risk appetite.
“Our integration planning is well progressed and we have ensured that appropriate risk management and control processes are in place from Day 1. We have a clear organisational structure, my Executive Leadership team and their direct reports have been announced and we are now focussing on implementing a best of both approach for the wider organisation. ”
Ian McHoul, Linda Adamany and Roy A Franklin have been appointed to the Wood Group board as non-executive directors.